FD’s are one of the oldest and most common methods of
investing. Incase you do not know how it works, you have to give the
financial institution a certain sum of money for a certain fixed period
of time. After that time period is over you will get the original
amount with some interest that you have earned for the time period you
invested your money.
Just to give you an idea about the time periods and the interest rates you can earn, you can check this
out. It is a link to the ICICI Bank FD interest rate chart. All the
major banks and other financial institutions also have different FD
FD’s are not very “liquid” investments. If you
invest your money in FD’s, you will not be able to withdraw it
until the FD matures. Generally, if you need to remove your money
before the maturity of the investment, you will be able to do so but
you will loose the interest that you were supposed to earn. There are
some FD’s that allow you to claim your interest every month or
every 6 months etc. There are many different schemes with many
Besides this, if a particular interest rate is decided at the time
of investing and the interest rate goes up while your money is
invested, you will not be able to enjoy the higher interest rate.
However, now-a-days the banks and the financial market is becoming
very competitive. You need to check up on the different types of FD
schemes available before making any FD investments.
There are FD’s offered by non-financial institutions like
companies etc. also. These are generally FD’s that will give good
rate of returns. They are called Company FD’s.
However, the risk involved is also moderately high. However, the companies try to get themselves an AAA rating according to the specifications of the RBI. If a company has an AAA rating, then it can be considered to be a safe investment.
Company Fixed Deposits forms are available through various broking agencies or directly with the companies.
Minimum investment in a Company Fixed deposit varies from company to company. Normally, the minimum investment is Rs.5,000. For individual investors, there is no upper limit. In case of recurring deposits, the minimum amount is normally Rs.100 per month.
Company Fixed Deposits have varying duration; they may vary from a minimum of 6 months to 5 years or even more.
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